Resources

New JCT Minor Works Building Contract 2016 Edition

The JCT has published its updated JCT Minor Works Building Contract, 2016 Edition. Key changes include:

Payment – section 4 now represents a more simplified approach with a common payment regime applying to both interim and final payments.

Insurance of the works – section 5 now provides for greater flexibility and an extension of (Works) Insurance Option C. However, greater care should be taken (hand in hand with appropriate input from your insurance broker) when defining precisely what the agreed insurance arrangements are.

Termination – section 6 now contains a new right to terminate to comply with legislation which applies where the employer is a public authority; giving a contracting authority the ability to terminate a contract if substantial modification has occurred in relation to that contract.

CDM Regulations 2015.

Provisions for the grant of performance bonds and parent company guarantees.

It is possible that some of these changes may be incorporated into other JCT contracts such as the Design and Build contract. We will know more once these are published.

The simplification of payment provisions is a useful amendment, particularly in the light of the numerous court disputes concerning payment mechanisms. In addition to the Balfour Beatty case discussed in our May edition of Construct, a further case has been reported this month (Bouygues (UK) Ltd v Febrey Structures Ltd [2016]). It is evident that when preparing a payment schedule for inclusion in a construction contract, you must ensure that you provide for contract overruns and include the correct dates for every single monthly payment cycle.